Editor's Note: The Second Seminar of the International Commercial Expert Committee of the Supreme People's Court and Appointment of New Members of the International Commercial Expert Committee was held successfully on December 8, 2020. The theme of this seminar is the Latest Developments of International Commercial Dispute Resolution Mechanism and the Research on Relevant Issues on International Law. The participants, on site or virtually, had discussions on the two topics, the Development of International Commercial Dispute Resolution Mechanism: New Situation and New Challenges and the Research and Application of International Law Related Issues in the Post-Pandemic Era, respectively. The texts of speeches delivered by the participants would be posted on the CICC's website. 

Legal Rules for a Digitalized World, International Uniform Law and Uniform Procedure

Johan Achiel Erauw

Emeritus Professor of the University of Ghent , 

Arbitrator of CEPANI

Ladies and gentlemen, I'm honored to become a member of the expert committee of the CICC. In my brief remarks, I will make about the topic of evolving international legal landscape and commercial dispute resolution.

I will begin with a reference to the world economic landscape. We have lived through a booming economy with a very strong globalization of all the activities. We see radical change into a digitalized economy and increased use of artificial intelligence. 

For commercial actors, we see at the start of the third decade of the 21st Century that institutions are still missing that could bring us global regulation and oversight in the digital environment. Private entities are, however, in dire need of rules that bring order in the digital field, such parties must be able to know their rights and enforce them across international borders. Any party that collects data, that stores data, uses them or eventually merchandises them, must follow rules on providing security and privacy protection. This applies to any kind of data, such as regarding health, finances or any communication whichever form it takes, or purchasing of services or of products online, about tracking physical movements and travel, or in regard to any legal rights and obligations such as liability. A number of civil law questions must be answered, such as who owns the data, what happens to the data when an account that holds the data ends or if a party of interest would die. They should be answered through the help of private international law, so that we could get some assurances for the international level. 

Now, the most powerful companies in the digital business are American and Chinese companies. European companies have been much less successful, but Europe has been in the forefront of legal actions. The EU authorities for antitrust actions have, for example, put a check on the power of US corporations. And the EU has promulgated a regulation called GDPR (General Data Protection Regulations) that holds many of the rules relating to aspects that I have mentioned just now. California, for example, has introduced a near copy of the European regulation, but we must see much broader expansion of these or similar rules on data protection. 

Businesses are best served in support of their economic activity with uniform international rules and with international legal harmonization. The most successful among such rules are found in the United Nations Convention on the International Sale of Goods of 1980 (CISG) that covers the most important trade transaction, namely, sale of goods. The Convention counts 94 member states and is still always increasing in geographical scope.  

And I also read that in the new Civil Code of China enforceable from the beginning of next month, the sales law was largely influenced by CISG. There are other successful products of unification. And I just mention to you, the United Nations principles on international commercial contracts, which are much broader than the sales contract. These were finalized in 2016, and it is just an excellent body of legal rules useful for anyone involved in drafting international contracts or in disputes over such contracts, not to say in resolving those conflicts.  

I now quickly turn to dispute resolution and I signal to you that there is a continuing evolution in facilitating or supporting international procedures before state courts. There are several treaties that have been successful, meaning that they are ratified by a big number of member states. Other treaties on the procedural cooperation must still get more ratification and yet other procedural difficulties have not yet been covered in treaties, and we must work on advancing cooperation at those levels.  

I mention to you the important treaties. First, we have the treaty of the Hague Convention on PIL that organizes service of summons abroad. That is the writ of action that introduces proceedings; but the treaty also covers the service of court documents, such as the final decision. This convention is applied in the 78 member states, including China. A second treaty that I mention is about the abolishment of the requirements to legalize court documents that takes away difficulties and avoids delays in proceedings. But China is not a member of that very important international treaty. Then you have the crucial issue of jurisdiction, namely, the question where can one start legal proceeding. Efforts have been made at The Hague Conference on Private International Law to unify this field on the broad international level. But they have only been successful for the much narrower area of jurisdiction based on party agreements, the so-called “choice of court” clauses. The Convention of 2005 on Choice of Court Agreement is now applicable to all the European member states, China has signed this in 2017, but I understand that the ratification is still ongoing.  

There are other bases for procedural cooperation that are currently aided by conventions, such as the obtaining of evidence abroad. This is of course a very important thing. Ratified by many countries, but China is presently not among those countries. The related discovery proceedings, such as they are practiced in the United States, are not yet covered by the international convention, and that could further facilitate proceedings. 

Group actions have been considered as very important since consumers that were buyers of Volkswagen cars in the United States were able to sue the Volkswagen through a class action suit. Europe is going to introduce this, but has not yet come to the conclusion of the process. Many individual countries have rules on group or “class actions”. But the difficulty is to be successful with such group proceedings across national borders. So, there is a work to do.  

The most important aspect of all is the enforcement of decisions and there is no major success in the international field, but there are regional successes, China is, waiting to become a member of a new initiative in the Asia region.  

And with that, I close my remarks, my time having run out. I thank you for your attention.  

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*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.